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US-China Relations

China Again Fell to the Third Largest Trading Partner Position of the U.S.

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that, in the first four months of this year, the largest trading partner of the United States was Canada, with a bilateral trade volume of US$258.5 billion. Mexico also surpassed China to become the second largest trading partner of the United States, with a bilateral trade volume of $249.8 billion. China fell to the third position, with the total bilateral trade volume of US$241.1 billion. The primary reason for the US-China trade decline is that, in April, U.S. exports to China fell by $1.6 billion, and imports from China fell by $10.1 billion. An important reason for the continued rise in total U.S. trade is that inflation is going global, driving up the prices of imported goods. As we all know, inflation in the United States is very serious at the moment.The inflation rate has reached its highest level in 40 years. Consumer prices have continued to rise, especially gas prices. Thus the U.S. government has been heavily criticized. The U.S. Federal Reserve has already acted and raised interest rates. At present, the U.S. dollar is relatively strong and the currencies of many countries have depreciated, which will help promote U.S. imports. As the world’s factory, China has been the world’s largest trading country for many years. Last year’s total import and export trade volume exceeded US$6 trillion. The United States is China’s largest trading partner.

Source: NetEase, June 9, 2022
https://www.163.com/dy/article/H9DP12BI0519TG73.html

Nike Announced Ending Its Running App Services in China

Shanghai-based Chinese financial news site East Money recently reported that the Nike Running Club (“NRC”), a running app owned by Nike, issued a notice to users of service suspension. The announcement stated that, due to business plan adjustments, the NRC APP will discontinue its services in China starting July 8, 2022. NRC will provide data export services for runners in need. Garmin’s sports equipment will stop synchronizing data with the NRC APP, effective immediately. Since the APP was launched, more than eight million registered users in China have run more than 100 million kilometers together. The Paper advised that, in late May, some runners also reported that the NRC APP displayed a notice on the relevant page that the service would be suspended, informing that the operation in the area where the runners were located would be stopped on June 30. Some Chinese netizens lamented that many foreign brands have withdrawn from China recently, such as Amazon Kindle and Airbnb.

Source: East Money, June 8, 2022
http://finance.eastmoney.com/a/202206082405491532.html

Oriental Daily: Amazon Halted Kindle Business in China

Popular Hong Kong newspaper Oriental Daily recently reported that global E-commerce leader Amazon said it will stop supplying Kindle e-book readers to Chinese retailers and, next year, it will close its Kindle e-book store in China. Amazon announced this decision on its official WeChat account and said the company was adjusting the strategic focus of its business and that other business lines in China would continue to operate. Amazon will cease operating its Kindle e-book China store on June 30, 2023. Customers will not be able to buy new e-books. For e-books already purchased, customers can download until June 30, 2024, and continue reading thereafter. The Kindle app in the Chinese app store will also be removed in 2024. Amazon China’s business includes cross-border e-commerce businesses that include Amazon overseas purchases, Amazon’s global store, Amazon advertising, Amazon global logistics, Amazon cloud technology, Amazon smart hardware and services, and other Amazon products. A spokesman for China’s Ministry of Commerce said earlier that he noticed that Amazon had just announced the closure of its e-book business in China. As the second largest consumer market in the world, China is rapidly developing and emphasizing its products and services. For various market entities, including foreign companies, it is a normal phenomenon in the market economy to adjust products and services accordingly.

Source: Oriental Daily, June 2, 2022
https://orientaldaily.org/news/international/2022/06/02/490430

U.S. Asked Beijing to Stop Putting Fake Statements into U.S. Officials’ Mouths

On June 5, a WeChat account Buyidao (补壹刀) published an article saying that it obtained exclusive information that U.S. officials from the Consulate in Guangzhou, China stating that the U.S. is using the Xinjiang issue to attack China.

The article claimed the information was provided by Mr. R, a supplier of a world-class sports brand, who attended a reception at the U.S. Consulate in Guangzhou in 2021. At the reception, Mr. R heard Sheila Carey and Andrew Chira, two U.S. officials from the  Guangzhou Consulate, saying the U.S. was “using the Xinjiang issue to hype up the so-called issues of forced labor, genocide, and human-rights abuses” as part of a “tug of war” with China. The ultimate goal of the “tug of war” was to “completely sink the Chinese government into a quagmire.”

Many of China’s official media, including the Communist Youth League and local governments, reposted the message. Li Yang, Counsellor from the Department of Information, China’s Ministry of Foreign Affairs, Chen Xiaodong, Chinese Ambassador to South Africa, and Hua Chunying, spokesperson of the Ministry of Foreign Affairs, also retweeted the message.

On June 7, the U.S. Embassy countered the false claim. It posted the following on Twitter in both English and Chinese, “We call upon the People’s Republic of China (PRC) to stop attributing false statements to U.S. officials or taking other actions that might subject our diplomats to harassment.” “Such action potentially endangers the U.S. officials being named and is inconsistent with the PRC’s obligation to treat United States diplomats with due respect and take all appropriate steps to prevent any attack on their freedom or dignity.”

Sources:
1. Deutsche Welle, June 8, 2022
https://www.dw.com/zh/补壹刀称美外交官承认故意炒作新疆人权-美方反击/a-62066134
2. Twitter

Global Times: It Is Not Russia Who ‘Weaponizes’ Food

China’s state media Global Times published an opinion article by Zheng Fengtian, the director of the Rural Development Institute of Renmin University of China, stating that it is not Russia who weaponizes food.

The article said, “Russian President Vladimir Putin said in an interview with the media that the West is trying to ‘shift’ the responsibility for problems in the world’s grain market to Russia. Ukraine, however, has multiple food transportation channels to choose from. Also, Russia will not stop Ukraine’s grain shipments from being shipped out. At the same time, he also announced that Russia’s wheat exports in the next agricultural year will increase to 50 million tons.”

The article continued, “Following its strategic needs, the United States and the West put the responsibility for this global food crisis on Russia and use a number of means to put pressure on Russia to release food. Putin, however, retorted when he had a phone conversation with Italian Prime Minister Draghi. He said, ‘It is groundless for the West to blame Russia for the supply of agricultural products in the international market.’ Putin attributed the current crisis to the sanctions that the United States and the West imposed on Russia. It is the anti-Russian restrictions imposed by the US and the EU that make the situation worse. Indeed, it is precisely because of these economic sanctions that the global food supply chain has been disrupted and food prices have soared. Instead of providing a viable solution, the United States and its allies are currently escalating conflicts by increasingly providing  new weapons and equipment, which will only increase future global food security risks.

“When the Russian side expressed its willingness to provide 50 million tons of grain to ‘help overcome the food crisis,’ the United States and the West accused it of ‘blackmail’ because the Russian side proposed that ‘sanctions against Moscow should be lifted.’ A U.S. Pentagon spokesman said Russia weaponized food. In fact, ‘weaponizing food’ is a common practice of the United States. It is precisely because the United States has used grain as a “weapon” many times that grain has become a main source of the problem in the current global trade. Even the developed countries dare not freely hand over grains to the international market.

“On the one hand, the United States continues to add fuel to the conflict between Russia and Ukraine and intensifies sanctions against Russia. On the other hand, the United States has made arrangements in its own country ahead of schedule to grab Russia’s share of the world’s food market. According to reports, U.S. President Biden has increased the number of counties eligible for “double crop insurance” nationwide by 681 to 1,935, and the federal government’s investment in domestic fertilizer production has increased from $250 million to $500 million, to stimulate fully the export of American agricultural products and increase the external dependence on American food. It seems that the real intention of the United States is to expand its hegemonic advantages to the field of food security.”

Source: Global Times, June 6, 2022
https://opinion.huanqiu.com/article/48J1rhGFuKN

China’s Think Tank Report on Sino-U.S. Relations after the Russian-Ukraine War

The Chongyang Institute of Finance at Renmin University of China published a research report on May 30, titled. “The Great Siege: An Assessment of the Progress of U.S. Policy Toward China Since the Russia-Ukraine Conflict and China’s Response.” The report said that the Russia-Ukraine Conflict didn’t delay the United States from implementing comprehensive competition against China. The U.S. recently adopted an “integrated deterrence” strategy against China  and has sped up its strategic containment of China. By May 16, the U.S. had taken  24 actions to suppress China in the fields of the economy and trade, finance, ideology, military technology, and geo-politics. Though the U.S. called its strategic competition “integrated deterrence,” it has actually been conducting a “great siege” against China.

It listed five points related to the U.S. actions:

  1. Speed up building a small “Indo-Pacific economic and trade circle” (excluding China).
  2. Apply financial pressure on Chinese companies listed on the U.S. stock markets; threaten to freeze China’s assets outside China, and restrain American companies from investing in China.
  3. Attack China on the grounds of ideology .
  4. Stir up the Taiwan issue using the “salami slicing” method (advancing the U.S. position in small increments).
  5. Suppress China’s advancement in the military technology field.

Overall, the Biden Administration defines the Sino-U.S. relations as competition and its hard-line position will not change in a short period. The chance of a China-U.S. collision is increasing. There are three possibilities for the China-U.S. game:

  1. A high intensity game: China and the U.S. have a A full military confrontation.
  2. A mid-level intensity game: China and the U.S. gradually decouple.
  3. A low intensity game: The tension between China and the U.S. becomes the norm.

The report made the following recommendations:

  1. Create an anti-blockade and anti-sanction plan in the economic, trade, and finance fields. Develop Asia-Pacific regional cooperation to counter the U.S. Indo-Pacific Economic Framework (IPEF).
  2. Create a strategy to strengthen domestic finance.
  3. Speed up progress toward energy independence  and create a strategy to build self-sustained energy.
  4. Proactively define the agenda to lead the rhythm of the Sino-U.S. media fight.
  5. Talk to the world about the damage that would result from “Taiwan Independence” to prevent the U.S. from playing the Taiwan card against China.

It calls on China to give up the illusion that it can avoid strategic competition against the U.S., develop a bottom-line plan in case of a military showdown with the U.S., and proactively build the Sino-U.S. relations while adapting to the new norm of tense relations.

Sources: SINA, June 1, 2022
https://finance.sina.com.cn/china/2022-06-01/doc-imizmscu4593936.shtml?cre=tianyi&mod=pchp&loc=35&r=0&rfunc=30&tj=cxvertical_pc_hp&tr=181,

USCC: China’s Interest in the U.S. Agriculture Industry

The U.S.-China Economic and Security Review Commission (USCC) published a report that China is investing in the U.S. Agriculture industry in order to mitigate its own food shortage. These investments reduce Beijing’s reliance on imports and help China to obtain modern agricultural technologies. The report examines the main areas of Chinese investment in the United States, including land, livestock, grain, and relevant infrastructure, such as agricultural equipment and technology. It also presents considerations for lawmakers regarding further Chinese integration in the U.S. agriculture sector.

Source: USCC, May 26, 2022
https://www.uscc.gov/research/chinas-interests-us-agriculture-augmenting-food-security-through-investment-abroad